Tourism Kelowna denied request for Affordable Housing funds
City council shot down a proposal from Tourism Kelowna on Monday, to divert 50 percent of revenues from the Online Accommodation Platform (OAP) tax in 2021 from affordable housing to assist the struggling tourism industry.
The OAP fund charges organizations like AirBnB a three percent tax, which is paid to the City and set aside for future affordable housing projects and land acquisition.
Tourism Kelowna anticipated $2.96 million in Municipal and Regional District Tax (MRDT) income but is now projecting that to drop to $1.04 million, plus additional monthly payments budgeted by the City.
Mayor Colin Basran and Councillors Brad Sieben and Gail Given were in full support of splitting the revenues equally between housing and marketing resources to help drive economic recovery.
However, Councillor Mohini Singh pointed out the importance of remaining on track with the Affordable Housing Strategy.
“While I want to see a really robust tourism sector, housing is such a big problem in our community and if we're working on affordable housing I think we need to stay the course. Things don't happen like that, it takes a long time, and it takes concerted effort. Housing is not easy in this community, affordable housing is even worse,” said Singh.
Councillors Luke Stack, Loyal Wooldridge, Charlie Hodge and Ryan Donn agreed to maintain focus on the Housing Strategy.
Mayor Colin Basran, who voted in favor of the motion, said the OAP funds were a bonus to regulating short term rentals and allocating them elsewhere would not affect affordable housing.
“If BC Housing comes knocking tomorrow and says 'we have an opportunity,' I have every confidence that we would be able to find a way to purchase that property to move a project forward. So, to me this is not going to, for one year, inhibit our ability to move forward with affordable housing projects.”
Councillor Luke Stack argued OAP fees are supposed to offset their disruption to the housing market not pay to drive their business.
“We heard many people coming before us saying they have taken their homes out of rental housing and put it into the short term rental [market] and that had a very negative impact city wide, both in the cost of housing and the availability of housing. So this seemed to be a bit of a correction saying, 'hey, well if your industry is upsetting the former rental market then this would be a way to compensate for that'," said Stack.
The request was defeated in a 5-3 vote.
Tourism Kelowna will instead be advanced remaining 2020 budgeted funds in a lump sum of $143,000.